It's been almost a month since I was here - no one notices though - I haven't had much to say really. I am working too hard as usual not getting enough time off and haven't been near the golf stick things since June. I have been watching the beginnings of the great depression of 2008 on Sky news and wondering how it will effect me and my family. I know that governments all over the world are trying to bail out these mega financial institutions. But is it the right thing to do, when you consider that it was these self same institions that have caused the problem. I still can't get my head round this short selling business. My understanding is that person 1 borrows shares from person 2 and then sells them then buys them back at a lower price then returns them to person 2 and pockets the difference. So if p1 borrows 100,000 shares at £10 each and sells them - £1,000,000 value - he puts this in his pocket then when the shares have fallen to say £5 each he buys back the 100,000 shares - value £500,000 - and keeps £500,000 as his profit. Thats all well and good so far. When p1 gives p2 his shares back they are now valued at half what they were borrowed for so p2 has made a major loss on the deal where is p2's insentive to keep doing this. Take HBOS for instance short sellers in May borrowed shares at around £12 each and hammered down the value of these shares to around £3 each to make enormous profits then again just last week to hammer them again down as low as £0.88. The question has to be asked which idiots kept devalueing their own holdings by loaning out their stock to these 'spivs' and morally these people are thieves surely as I would go to jail if I tried to sell something I didn't own.
The life of accountants truly are mysterious.
